CTA Case No. 3804 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS l1UEZON CITY UNION CARBIDE PHILIPPINES, INC., Petitioner, - versus - C.T.A. CASE NO. 3804 tOMMISSIONER OF INTERNAL ' REVENUE, Respondent. X - - - ""'~"" -- - x . D E C: B CJ N Suit filed by petitioner Union Carbide Philippines, Inc., for tax credit of P988,459.00 representing the difference between the advance ~les ta>t paid and the ta >{ due on the various imported chemicais considered as solvents under Section 153 (f) of the applicable National Internal Revenue Code, after respondent Commissioner of Internal Revenue denied peti- tioner's claim in his lette~ of April 6, 1984. The antecedent facts as alleged in the petition for review and admitted by respondent are: L.! '

.< DECISION CTA CASE NO. 3804 - 2- 1. Petitioner is corporation duly organized and axisting by virtue of the laws of the Philippines, with principal office at 11th-12th Floors, Cibeles Building, Ayala Avenue, Makati, Metro Manila; while respondent is the government official in charge of the administration of all national internal revenue laws and rules and regulations issued- rt?lative thereto, � with office at the BIR Building, East Triangle, Dil iman, Quezon City, Metro Manila, where he may be duly served with summons in connection with this case. 2. On February 2, 1980, respondent Commissioner issued ruling declaring the . chemicals enumerated therein subject to specific tax at the rate of P0.61 per liter of volume capacity pursuant to Section 153(f) of the Tax Code, as amended by Executive Order No. 672, because said articles generally used as solvents and are petrochemicals. 3. In letter dated March 1' 1982, petitioner f i 1ed a c 1aim for refund of the excess of advance sales tax, which were paid on various shipments of the chemicals covered by the above- mentioned PIR ruling. . ~) '~ u

DECISION CTA CASE NO. 3804 - 3- 4. In a letter dated October 1, 1982, the respondent Commissioner partially ' granted said refund/tax credit in the amount of P660,497.00. 5. In a letter dated April 6, 1984 and received by herein petitioner on May 22, 1984, the respondent Commissioner denied the remaining portion of the claim ~or the reason that since the tax was shifted by petitioner to the purchaser, in effect the ~ ax was paid by the buyers of the solvents and therefore pe titioner is not the proper party to f i 1e the refund. It was found further that the rest of the importation which was a small portion thereof was used as raw materials in the manufacture of finished products by herein petitioner. Henc:e, the instant petition for review f i 1ed on June 22, 1984. As specia l and affirmative defense, among others, res pondent alleges that this Court acquired no jurisdiction over this case. Admittedly, petitioner received the letter dated April 6, 1984 of respondent denying the claim for the refund of - �.:. the balance of P988,459.00 on May 22, 1984. The

DECISION CTA CASE NO. 3804 - 4- .. records show that the petition for review was filed on June 22, 1984 or a period of thirty-one days, clearly beyond the reglementary thirty-day period to appeal. The only issue now which respondent would like to present is whether or not this Court has acquired jurisdiction to . entertain petitioner's appeal. Respondent's submission that this Court has no jurisdiction to entertain the instant case is meritorious. The rule has been established that as regards the period within which to appeal to the Court of Ta>: Appea 1s, the t.a:�:payer must perfect his appeal within thirty (30) days from the date of his receipt of the decision of the Commissioner of Internal Revenue denying his claim for refund, pur-suant to Section 11 of Republic Act No. 1125, but in no case beyond two (2) years from the date of payment., in accordance with Section 292 (now Section 243) of the National Internal Revenue Code. (Collector of Internal Revenue vs. Sweeney, et al., 54(

DECISION CTA CASE NO. 3804 - 5- ., t, � Revenue, 107 Phi 1. 232; Commissioner of Internal Revenue vs. National Power Corporation, L-18874, January 3 0~ 1970~ 31 SCRA 112.) To quote the provi s ions of the law applicable: Sectic a 7 and 11 of Republic Act No. 1125 provide: "SEC. 7. J..h.l.!:.~_?d..i.s;._t;_,!:.Q!J.. �- The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal as herein provided - " ( 1) R.~s;..! . 2..i..P.n~- of the Commissioner of Interna l Revenue in cases involving d is put e d asses smen t s ~ [�.f .'=!.OJ:;L ....Q.L.....J.D..~.~-r.D.9..t [..�.Y...�H'=!.�'___.i9.~U~_2. ~ fees or other charges~ penalties imposed in relation thereto~ or other matters arising under the National Internal Revenue Code or other law or part of the law administered by the Bureau of Internal Revenue; ">!XX XHX XXX. 11 II SEC. 11 . ~.b.9.____ffi~..Y._........~.P.P_�g_~1J ____..�.f.f.g_c:_:t..........9.t ~R..RJ?..f:l:J.. . - Any person~ association or corporation . adve rsely affected by a decision or ruling of the Commissioner of Internal Revenue~ the Collector of Customs or any provincia 1 or city Board of Assessment Ap Pza 1s maY..........fJJ.E':......._~~-Qp_~~-t_..!.D. t.!J.~. _. _C..QJ.J. ..r...:t_ Qf___T.:u:L .. A.R.P-~~.1 s_ .......~J. t..h .i,.r.t_. _:t..b....t..J'.::..t..~ g_~.Y.?........~..f..t.�r.___~.b~---L�.!.;f?.i_pJ;_..Q..f...__,?.J,,!.C tl......Q~f.:_i...?.J_QD...._Q_L L.'=L!...i..D.9.� .. xxx XXX XXX. 11 (Underscoring supplied) Section 243 (formerly Section 292) of the National Internal Revenue states: 5

DECISION CTA CASE NO. 3804 - 6- II SEC. 243. R~.!.=..9..Y.~.r.L....9..f_ _t;_~0.....~x:.r..Q.IJ.g.QJ,,_\?.1Y. QL...._:tJ.J ._g_g9J.J.Y-.____!.=_. 9_t.l.~c;..t.~. ..�1 .!!. No s u i t or proceeding shall be maintained in any court for the ~ecovery of any national internal revenue ta:-: hereafter alleged to have been erroneously or illegally assessed or ccl 11 ec ted~ or of any pen a 1 ty claime~ to have been collected without authorj �-y, or of any sum alleged to have been exc essive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained~ whether or not such ta>:, pen a 1 ty ~ or sum has been paid under protest or duress. "In any case, no such suit or proceeding shall be begun after the e>:piration of two years � from the date of payment of the ta>: or penalty regardless of any supervening cause that may arise after payment: Provided, however, that the Commissioner may, even without a wr�itten claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." As correctly . pointed out by respondent, in the case at bar, the letter-decision of respondent Commissioner of Internal Revenue contained in his 1et ter dated Apr i 1 6, 1984 denying the c 1aim for refund of the balance of P988,459.00 was admittedly received by petitioner on M"i~--~-�,____!_~1;;!1. � The petition for review was filed on June 22~ 1984 or a period of thirty-one (31) days, beyond the 5 ,�.:..I,

DECISION CTA CASE NO. 3804 - 7- ~eglementary period to appeal as provided for under the aforequot~d Section 11 of Republic Act No. 1125. Settled is the rule that the failure of a taxpayer to interpose an appeal to the Court of Ta x Appe als the decision or ruling of the Commiss ioner of Internal Revenue within the thirty- day period provided for in Section 11 of Republic Act No. 1125 deprives s aid c our-�t of j ur isd.ic tion to entertain said app ea 1. (Commi~sioner of Internal Revenue vs. Western Pacific Corporation, L- 18804, May 27, 1965, 14 SCRA 105; Filipinas Investment and Finance Corporation vs. Commissioner of Internal Revenue, L- 23 501, May 16, 1967, 20 SCRA 50; Surigao Electric Co., Inc. vs. Court of Tax Appeals, L-25289, Jurie 28, 197 4, 57 SCRA 253.} The statutory period of thirty days for appeal being jurisdictional, the Court of Ta>: Appe als may 1!.!_Q_ty_ e.r_.P..P.r..Lq_ dismiss the cas e if it is shown that the appe.al was filed out of time. (Ker & Co. vs. Collector of Internal Revenue, L-12396, January 31, 1962, 4 SCRA 160.} Furthermore, petitioner's petition for review praying for the refu~d/tax credit of the amount of

DECISION CTA CASE NO. 3804 - 8- � P988~459.00 representing the difference between the advance sales tax paid and the specific tax on the var-ious imported chemicals considered as solvents was filed with this Court beyond two (2) years from date of payment of the advanc�e sales tax. Petitioner's right to the refund or tax credit has thus prescribed pursuant to Sec ti.on 243 ~ ~14Pt.i!i_ , of the National Internal Revenue Code. Again~ as by respondent~ records show that the advance sa 1es ta:{ a 11 eged 1y claimed in excess were paid in 1980 and 1981 (par. 3; Anne>: B, petition for review). A 1 though the c 1aim for- t �efund was f i 1ed on Mar�c h 1 ~ 1982 (par. 3!' pet.iti.cJn for rE~view) well wi.tl;in the two-year per-iod, however-~ the suit t.o r-ecover- the ta>: was filed only on ~h!J.:t~ - ����~ -~ --'--���-�l9J,;J..4.. ~ more than two year-s fr-om the date of payment of the ta>: in 1980 and 1981.. The r-ule on this poiht is stated by the Supr-eme Cour-t in this wise, to wit: ">: x >: We have r-epeatedly held that the c 1aim for- refund with the Bureau of Internal Revenue and the subsequent appeal to the Court of Tax Appeals must be filed within the two--year- per-iod. If, however, the Co 11 ector- takes time in deciding the .. 5 4

DECISION CTA CASE NO. 3804 - 9- claim~ and the period of two years is about to end~ the suit or proceeding must be started in the Court of Tax Appeals before the end of the two- year period wi t.hout awai t.ing the dec ision of the Co 11 e c tor." (Commissioner of Internal Revenue vs. Victorias Milling Co., Inc., et al., G.R. No. L- 24104, January 3 ~ 1968) WHEREFORE, the petition for review filed in the above-entitled case is hereby dismissed for lack of jurisdic' ti9~, at petitianer�s costs. SO ORDERED. Que zon City, Metro Manila, August 26, 1988. AMANTE F Presidin WE CONCUR: Judg e z.~ As soc iate Judge 5 t... \.J-

DECISION CTA CASE NO. 3804 10 - ~ E RT I F I CAT I 0 N I hereby certify that this decision was reac hed after due consultation among the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Consti.tution. AMANTE F Presidin Judge Court of Tax Appeals 5G